Westpac of Thieves
Imagine if, upon trying to enter a business, you encounter a large and somewhat dangerous hole dug at the entrance. Determined, you seek a path around, but are wary of the many obstacles and warning signs. Helpfully, the business has provided staff who step forward, guiding you through safely. You thank them, and ask “When are they going to fill the hole in?”
“We have no plans to fill the hole,” they reply, “but we are going to put up more signs and provide more guides”.
Sound vaguely familiar? Well, this is the premise on which banks conceive their fee-structures. Planned at policy level by the CEO’s and their managers, then implemented via their computer servers & websites, they set financial traps that are designed to steal from their own customers. They then pretend that they are ‘there to help’. This is what is referred to by banks as ‘Standard Banking Practice’.
What I wish to show in this article is the main mechanisms that allow this to happen, and our (the customers) complicit role in allowing it to continue.
As most of us know, as far as institutions go, banks exhibit the behaviour of thieves, beggars & parasites. This is not a slanderous statement, as all the major banks operating in New Zealand have been charged and found guilty of fraudulently removing funds from their own customers accounts. They are renowned tax dodgers, frustrating our government, who appear powerless or unwilling to prevent this behaviour. On the international scale, banks have shown us that when their shit hits the fan, the tax-payers get covered in it, and then they come begging for a bail-out. Welfare for the rich. Deep down, it seems, bankers must be socialists!
All this must be stated, if only to avoid the elephant in the room. Yet, despite the above assessment, I believe the banks and their employees perform an essential and valuable service to society. The question is, “How did banks come to despise their own customers in such a way as to trick, trip and rob us at every given opportunity, and with such impunity?”
One starting point to explore this question is the so called ‘dishonour fees’, which can be as high as NZ$35, but have been reluctantly lowered (but not removed) due public pressure. These fees are worth exploring, as they represent the height of arrogance and contempt that banks have adopted towards their own customers. It can be easily shown that they are a form of automated theft. Simply put, they offer no service in return.
Without exception, all banks, including the New Zealand owned banks, charge this punishment fee. This fee occurs when Automatic Payment and Direct Debit set-ups find your account has insufficient funds to go through with an arranged payment.
Now, the logical way to deal with this situation is a simple if-then statement in the computer code. It could be along the lines of ‘If insufficient funds, do not proceed with payment’. This is exactly what happens if you walk into a branch, then attempt to withdraw cash over the counter. If you don’t have enough dosh, they send you off. You don’t even have to pay the usual over-the-counter fee they charge to encourage you to do online banking. What they won’t say is, ‘You have insufficient funds – please pay $25 before exiting the bank’.
Now we’ve reached the crux of the matter. They don’t charge a dishonour fee when you are physically present. It is highly likely you would quit their bank immediately, abuse them, or even physically assault them. This would be highly probable human behaviour that would cost the banks valuable staff, or lawsuits, or at the very least, wake people up enough to actually protest and take action. In other words, they don’t want a scene!
Triggering this fee imposes no cost what so ever to the banks, and the trigger is entirely preventable with a simple change of code in the banks’ computers. But that code isn’t going to change one byte until the higher level code changes. That higher level code is called Banking Policy, set by the bank’s CEO’s, guided by Standard Banking Practice – it’s remarkable how identical these policies are from bank to bank.
In their clumsy attempts to rationally justify these fees, banks have adopted the role of ‘Bill Payment Police’. They argue that you must be punished if you don’t pay your bills, and conveniently profit from taking this approach. Yet, seeing as the party that’s owed the money is not them, is absolutely none of their fucking business. They argue that you attempt an unauthorised loan by overdrawing. In-fact, we are merely wanting to pay a bill. This ‘pseudo-loan’ was initiated by the banks code – not by the customer. Given a choice, a customer would never choose that option (recall the above example of over-the-counter withdrawals). Clearly, the arguments are demonstrably pure and blatant bullshit.
If the banks’ justification is blatantly wrong, how do they get away with it? I took this series of arguments to the Office of the New Zealand Banking Ombudsman and through her, engaged Westpac Banking Corporation on the matter. She was able to show me, with some degree of sympathy, that the banks actions were legal according to her jurisdiction of the charter she has to make rulings from.
Here are three important things I learned about this office:
1). It is a private office, created not independent of the banks, but by and for the banks. It is a cultivated illusion to think there is any government protection from this office. It does not answer to the government other than via common law. The banks got together, conceived the charter, and all agreed to abide by it. Whether there was any public input into the process, I’m not sure. It does offer protection to customers, but nothing more than any honourable organisation wouldn’t offer anyway.
2). There are some important and significant exceptions that cannot be contested, so it is very much tipped in favour of the banks. In particular, fees are exempt from any contest.
3). According to the office’s charter, a complainant may not take issues covered by the charter to the Commerce Commission. This was pointed out to me, quite smugly, by Westpac. I question the legality of this. If anyone needs to look at Standard Banking Practice, it’s the Commerce Commission!
As you can see, they have expertly sewn it up into a toothless, puppet of an institution called the Office of the Banking Ombudsman. This is a theme that repeats in history. Behaviour that is made legal, but clearly and demonstrably violates our common sense of fairness.
As alluded to in the analogy at the beginning of the article, we find that instead of the simple solution of filling the hole, banks provide costly services to alert you via cell-phone, or multiple attempts to pay. All this is a mere diversion from the banks blatant act of theft. They set it up in a way where you have to be constantly vigilant, always on the lookout for some charge or fee depleting your account. For fucks sake, the whole point of using these services is to avoid that, so why sabotage your own customers? Why undermine the very intent of the service?
Because it is mainly low dough that trigger these fees, unsurprisingly, it has a particularly adverse affect on the poorer among us, You might ask, how is getting charged $20 to $40 supposed to help someone pay their bills? Let’s just call it a ‘Tax for Being Poor’…
Let’s not kid ourselves here. It’s money for nothing for the banks, and they ain’t gonna give it up without a fight…
A Taste of Things to Come.
It’s electric money – that’s the problem. There was a time when you kept valuables and real cash in your bank vault. If the bank tried to remove something of yours there would have been an uproar, perhaps even a mass exodus of the banks customers. This kept the bank’s behaviour in check. Now it’s all digital, electric pulses, not even any gold to back it up. As most banks are founded by plucking money out of thin air, so the custom continues, with banks operating with virtual money, plucked out of digital space.
And here lies the banks not so secret weapon:
Banks are the only private institution that can reach in and take funds from your account without your explicit agreement.
And that fact is the seat of their smug arrogance. I bet you would love it when someone dilly-dallied about a bill you sent them, you could just pull it from their account.
Now, you do have a binding contract with banks, either via a signed document when you open your account, or by the act of using their services.
These agreements are bogus for two reasons:
1. They are so open to change after the agreement’s date, that they are largely pointless. I call them ‘open cheque’ contracts. When a contract states: ‘all terms subject to change at any time post signing’, why bother? They are going to impose whatever they can get away with, and this conviction is borne out by their behaviour.
2. We have no choice. We have to use banks, but they take blatant advantage of this, and abuse the trust we invest in them. Remember, most of the money in a bank isn’t theirs, it belongs to the people that lent it too them. Somewhere along the way, the banks forgot this. The fact they all operate by the same Standard Banking Practice template serves to reinforce this sentiment.
It gets darker. Westpac pointed out to me that if I don’t agree with their terms of service, then I don’t have to use the services. I agree with this in principal, and have put this advice into practice. I therefore do not use Autopayment services, nor Direct Debit – why would I hand over the keys to my account? But, alarmingly, in practice, I find this severely limits my choice of rental housing as most agents insist on DD payments. In another example of big brother brickheads, John Filsell, the manager of Recreation & Sports in Christchurch, which run the council pools & gyms, concocted a contract based tightly and solely around DD payment terms. I attempted to join, and when I offered to just pay it by eftpos all up, they stated they had no facility to accept my payment, ie, the contract’s authors willfully blocked this option. You’ve got to ask – Why? As we spoke, they were letting day users pay $5 entrance fees by eftpos. So if you suffer the illusion that cash is legal tender, think again. Total Bullshit!
So, something important is happening to us here with our electronic cashless society. The banks state that we have choice, when we clearly don’t. If the choices are identical, that’s not choice. I exercised my choice, and find important aspects of a society denied me. I mean, housing and health related activities are important aren’t they? And post ‘quakes, there’s fuck all houses to rent in Christchurch, and fuck all pools & gyms to join. If I stopped using banks all together, I would effectively exempt myself from society.
So, what is our role in all this? Well, we sure are a bunch of sheep here, and sleep walking sheep at that. We don’t want to face just how important the current behaviour of banks, councils, real estate agents insurance firms etc, as relating to how a banks policy can affect citizens choices.
I’m often astounded at a Kiwi’s ability to be so polite while they are knowingly being ass-fucked. I even get people defending the banks behaviour, citing the banks own propaganda, all while they are being ass-fucked! Our hard-earned money is siphoned from us simply because they can, they want to, and we let them.